Two-thirds of the nation's 2400 schools are this week being told their decile is changing.

About 784 schools are being allocated a higher decile, which will lead to a cut in their targeted funding and a similar number will have lower deciles, which will boost their funding.

Parata has previously described decile funding as a "blunt instrument" and is now signalling its time is almost up.

"There has been so much noise about how poorly targeted decile funding is and so much erroneous connection between quality of learning and decile, that I think it is quite important to hear that feedback," Parata said.

"We're going to have to have a look at it but we need to get through this recalculation first."

Schools would have to live with the system only "for the present and for the near future," she said.

Parata has previously hinted at replacing deciles with academic progress measures, before ruling out any funding link to academic results. It remains unclear what would replace deciles as the method of targeted funding, although Parata suggested targeted funding would remain in some form.

"I do absolutely think that we need to be targeting to students at the highest risk of poor outcomes," she said.

"But I'm not convinced that the decile system is the best way to do that."

Under the decile system, each school is allocated a number between one and 10. A higher number reflects a higher socio-economic school community and a lower number a lower one.

An analysis of the latest National Standards results from every school in the country where the assessment is used, confirms higher-decile schools consistently outperform lower-decile schools.

The data, published today on stuff.co.nz's School Report site, shows the proportion of pupils well below standards in reading, writing and maths generally increases the lower down the decile scale a school is. Conversely, the proportion of pupils above the standards trends upwards as the decile increases.

Parata said that students from poorer homes were generally less well-prepared for school.

"But it is not a determination of their ability to learn or a school's ability to teach," she said.

"It is absolutely not the case that decile is a proxy for the quality of teaching and learning.

Post Primary Teachers' Association (PPTA) president Angela Roberts said it was often middle-decile schools that got the toughest deal out of decile funding. They did not qualify for a large chunk of decile funding but were not as able as higher-decile schools to ask parents to raise extra funds.

After carrying out its own review of funding, the PPTA last year suggested decile funding be replaced with a system of "profiling". That would show the mix of students from each socio-economic group within any school and allow funding to be allocated according to individual student needs.

Secondary Principals' Association president Tom Parsons said funding needed to be directed at children who were at the highest risk of failing. However, in some cases extra literacy and numeracy resources for students and professional development for teachers could have more impact than extra funding.

"There's a whole lot of reasons why a school could be failing, and poor leadership could be one of them," Parsons said.

HOW FUNDING IS TARGETED IN OTHER COUNTRIES

In Australia, school funding is targeted through the Low Socio-Economic Status School Communities initiative. About 1750 schools serving disadvantaged communities, including Aboriginal and Torres Strait Islander communities and many schools in rural and remote areas, are eligible. Each school gets a $5000 grant to first assess the challenges, an additional "highly accomplished teacher" appointed and funding of approximately $200 per student per year for two years.

In Britain, a system called "Pupil Premium" gives schools extra funding to raise the attainment of disadvantaged pupils. It is based on eligibility to free school meals, which go to most children of beneficiaries. Every primary school-age child eligible for free school meals at any point in the last six years attracts NZ$2657 each year for their school. The rate for secondary schools is $1911 per student. Children who have been looked after for one day or more, are adopted or leave care under a special guardianship order, attract $3883 in extra funding to their school each year.